Question 1

What is a 'secondary boycott'?

Accepted Answer

A secondary boycott occurs when two or more businesses use pressure or coercion to encourage a third business to cease dealing with a fourth business that is the subject of a boycott. This type of boycott is generally considered unlawful in many jurisdictions.

Question 2

The Competition and Consumer Act 2010 (Cth) prohibits 'exclusive dealing'.Exclusive dealing occurs when:

Accepted Answer

Exclusive dealing occurs when one party imposes restrictions on the other party's capacity to choose where and from whom they buy products. This can include requirements that the other party only buy from a specific supplier, or that they not buy from certain competitors. Such behavior can restrict competition and may be prohibited under the Competition and Consumer Act 2010 (Cth).

Question 3

There were three important changes to the law introduced by the Competition Policy Reform Act 1995 (Cth).Which of the following is not one of them?

Accepted Answer

The establishment of the office of the Consumer Ombudsman was not one of the important changes introduced by the Competition Policy Reform Act 1995 (Cth). The other three choices (A, B, and C) were the important changes made by the Act.

Question 4

According to the ACCC, a misuse of market power by a business is generally not the type of conduct that:

Accepted Answer

Misuse of market power is typically conduct that cannot be justified by efficiency or genuine commercial rivalry, as it involves actions that harm competition rather than promote it.

Question 5

The Trade Practices Tribunal described a market as having five different dimensions that it will consider when determining whether or not that market is competitive.It identified one of these dimensions as being the most crucial.Which is it?

Accepted Answer

The Trade Practices Tribunal identified barriers to entry as the most crucial dimension when determining whether or not a market is competitive. This is because if barriers to entry are high, it is difficult for new businesses to enter and compete, leading to a lack of competition in the market. On the other hand, if barriers to entry are low, new businesses can enter and compete, leading to a more competitive market.

Question 6

A few years ago anti-trust proceedings (proceedings for uncompetitive conduct) were brought against Microsoft in the USA.The company was alleged to have abused its monopoly in the desktop operating systems market.The Court decided that:

Accepted Answer

The court found that Microsoft had created barriers to entry that made it prohibitively expensive for competitors to develop viable alternatives to Windows, thus abusing its monopoly power.

Question 7

Which of the following is not true of 'competition' under the Australian Consumer Law?

Accepted Answer

Competition is encouraged under the Australian Consumer Law to promote fair trading and consumer protection, not discouraged.

Question 8

What is the correct name for the type of actions that are only prohibited under the Competition and Consumer Act 2010 (Cth) Part IV if they have the effect of substantially lessening competition?

Accepted Answer

These types of actions are referred to as conditional offences, as they are prohibited only if they have a particular effect (i.e. substantially lessening competition). Per se offences are actions that are always prohibited under the law, regardless of their actual effect, while strict offences and contingent offences are not terms typically used in this context.

Question 9

What is a 'per se offence' under Part IV of the Competition and Consumer Act 2010 (Cth)?

Accepted Answer

A 'per se offence' is an offence arising from conduct that is so obviously anti-competitive that it is prohibited outright, without the need to prove its effects on competition. Part IV of the Competition and Consumer Act 2010 (Cth) contains a number of provisions that create per se offences.

Question 10

In determining whether conduct by a business has the effect of substantially lessening competition, which of the following issues need not be considered?

Accepted Answer

The desirability of competition within the market may be a relevant consideration, but it is not necessary in determining whether conduct has the effect of substantially lessening competition. The other options are all necessary considerations in making this determination.

Question 11

The role that was once performed by Price Surveillance Authority ('PSA') is now undertaken by the Australian Competition and Consumer Commission ('ACCC').That role is:

Accepted Answer

The ACCC monitors prices in areas where competition is not effective to protect consumers and ensure efficient prices, a role previously performed by the PSA.

Question 12

Which of the following cannot be authorised by the ACCC?

Accepted Answer

The ACCC cannot authorise misuse of market power as it is a serious breach of competition law that cannot be justified under any circumstances.

Question 13

Which of the following is not a per se offence under the Competition and Consumer Act 2010 (Cth) and is therefore not prohibited unless it has the effect of substantially lessening competition?

Accepted Answer

Primary boycotts, price fixing, and resale price maintenance are all per se offences under the Competition and Consumer Act 2010 (Cth), meaning they are automatically prohibited regardless of their effect on competition. However, secondary boycotts require a substantial lessening of competition to be prohibited.

Question 14

The prohibition of misuse of market power under the Competition and Consumer Act 2010 (Cth) is not designed to:

Accepted Answer

The Act does not prevent a business from having substantial market power; it only prohibits the misuse of that power.

Question 15

The ACCC cannot authorise:

Accepted Answer

The ACCC cannot authorise a misuse of market power as it is a breach of competition laws and cannot be justified under any circumstances.

Question 16

The difficulties of establishing the extent of a particular 'market' under Part IV of the Competition and Consumer Act 2010 (Cth) are numerous.This is because:

Accepted Answer

Trading activities often span across various sectors and do not fit neatly into clearly defined markets, making it challenging to establish the extent of a particular market.

Question 17

The ACCC is closely monitoring competition in the Australian wine industry.Which of the following factors is least likely to be emphasised by the ACCC in determining whether or not the wine market in Australia is competitive?

Accepted Answer

The volume of wine consumed in Australia is a measure of demand rather than competition in the industry. The ACCC is more likely to focus on factors related to competition amongst wine producers, such as the number of producers, cost barriers to entry, and arrangements between producers.

Question 18

Which of the following types of secondary boycotts will contravene The Competition and Consumer Act 2010 (Cth)?

Accepted Answer

The Competition and Consumer Act 2010 (Cth) prohibits secondary boycotts that have the purpose or effect of substantially lessening competition, such as creating a monopoly.

Question 19

While the Competition and Consumer Act 2010 (Cth) does not comprehensively define a 'market', the Courts usually accept the wide definition of a market as:

Accepted Answer

The courts generally accept the definition of a market as the area of close competition or field of rivalry between businesses, focusing on the competitive dynamics rather than just the physical or transactional aspects.

Question 20

A business that takes steps or makes an agreement that is designed to maintain or control the price of goods is engaging in:

Accepted Answer

Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

Quiz 12: Competition Law: Dealing With Other Businesses